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April 22, 2013

SEC Comings and Goings: Canellos, Ceresney Named Co-Heads of Enforcement

SEC specialized units may be broadened to include public company financial reporting and disclosure, says attorney Crimmins

Some new faces will be arriving at the Securities and Exchange Commission soon.

SEC Chairwoman Mary Jo White announced Monday that George Canellos, the current acting director of enforcement, and her former junior colleague at Debevoise & Plimpton, Andrew Ceresney, had been named co-directors of the agency’s enforcement division.

“George and Andrew are two of the best lawyers and finest people I know," said White in a statement. "They are a perfect combination to lead the talented Enforcement Division professionals who protect investors and keep our markets safe and vibrant.”

Canellos has been serving as acting director since January, replacing outgoing SEC enforcement chief Robert Khuzami, who left in early February. Canellos, who had been the division’s deputy director since June, had also worked with White when she was U.S. Attorney in Manhattan. Ceresney, 41, served as a litigation partner at Debevoise focusing on white collar criminal and SEC investigations, complex civil litigation and internal corporate investigations.

Under former SEC enforcement chief Robert Khuzami, the SEC set up five specialized units to crack down on financial wrongdoing in the areas of asset management, market abuse, structured and new products, foreign corrupt practices and municipal securities and public pensions.

Steve Crimmins, a partner with K&L Gates in Washington, who served for eight years as the SEC’s deputy chief litigation counsel, told AdvisorOne Monday that while there may likely be “some restructuring” in the enforcement division under Canellos, 48, and Ceresney, the “specialized unit structure will stay.” But he “wouldn’t be surprised to see a new specialized unit dedicated to public company financial reporting and disclosure.”

Two SEC commissioners, Elisse Walter and Troy Paredes, are also said to be leaving soon.

While SEC spokesman John Nester told AdvisorOne that Walter hadn’t said how long she would stay on, President Barack Obama is likely to name replacements for both Walter—a Democrat whose term expired last June—and Republican SEC Commissioner Paredes, “in the coming weeks,” David Tittsworth, executive director of the Investment Adviser Association in Washington, told AdvisorOne in a recent interview.

Walter is able to continue serving until Congress adjourns later this year, or until another person is nominated and confirmed by the Senate. Paredes’ term expires in June, and he has indicated that he would like to return to academia. Walter told reporters after a recent speech that she’d like to retire after leaving the agency.

An industry official who asked for anonymity told AdvisorOne that at least three people have surfaced as possible replacements for Walter and Parades: Mike Piwowar, an economist on the Senate Banking Committee's staff, would replace Paredes. Kara Stein of Sen. Jack Reed’s staff, or Smeeta Ramarathnam, SEC Commissioner Luis Aguilar’s chief of staff, are two possible replacements for Walter.

The “pairing” of Democratic and Republican nominees, Tittsworth told AdvisorOne, “makes it much more likely that the nominations could move quickly in the Senate. Thus, I expect that President Obama will have to make the nominations in tandem, sometime in the coming weeks.” Prompt Senate confirmation of both nominees is also likely, Tittsworth added.

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